What is Double-Entry Accounting?

Accrued expenses in the construction industry refer to the costs that have been incurred but not yet paid for by the end of an accounting period. These could include expenses related to labor, materials, utilities, equipment rentals, and other operational costs integral to a construction project. For example, a construction company may have used subcontractors for a part of the ongoing project, but the bill has not been paid by the end of the accounting period. This cost forms 'accrued expenses'. Even though these expenses are unpaid, they are recorded in the company’s income statement for that period, which allows for accurate reflection of costs associated with revenues earned. Accrual accounting methods offer a more precise measurement of a construction company’s financial health, providing a comprehensive picture of its earnings and expenditures.

A G703 is a continuation sheet used in the construction industry. It's part of the AIA (American Institute of Architects) document set for contract documents. The G703 form includes a schedule of values listing portions of the work, scheduled values, work completed, materials stored, total completed and stored, percentage of work completed, balance to finish, and the amount of change orders. Hence, it is primarily used for breaking down the contract sum into portions of work in accordance with a schedule of values prepared by the contractor. It provides a running total of completed work and can be updated as work progresses.

A construction lender is a bank or financial institution that provides short-term financing specifically for construction companies, developers, and builders working on construction and development projects. In commercial construction, these lenders control project cash flow by deciding when and how much money gets released throughout a project. Instead of providing all funding upfront, they release funds in phases as work gets completed and milestones are hit, which affects everyone involved in the project—especially subcontractors.

Here's how it works for commercial subcontractors: the lender has to approve each payment before the general contractor gets their money, and only then can the GC pay their subs. This means subcontractors are essentially waiting in line behind both their GC and the lender's approval process, which can stretch out payment timelines well beyond what's written in their contracts.

Construction lenders also require extensive paperwork before releasing funds, including lien waivers from all project participants and current insurance certificates. If any documentation expires or goes missing, it can freeze the entire payment process. This means subcontractors must stay organized with their accounts receivables, match their progress billing to lender draw schedules, and keep track of compliance deadlines for themselves and any lower-tier vendors and suppliers.

Siteline streamlines these A/R workflows by centralizing lien waiver tracking and submission, helping subcontractors prevent costly payment delays caused by missing documentation. Learn more here.